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Asian shares rise after Wall Street rally

Asian shares rose Wednesday, following a rally on Wall Street led by technology companies, although investors remain concerned about the war in Ukraine and inflation.

Benchmarks were higher across the Asian region, despite worries about rising energy costs. Oil prices rose, while the dollar gained against the Japanese yen.

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Investors were also closely watching what might happen with President Joe Biden joining a NATO meeting and EU Summit Thursday in Europe, where sanctions and the Russian oil embargo will likely top the agenda.

Japan´s benchmark Nikkei 225 surged 2.7% in morning trading to 27,947.26. Australia´s S&P/ASX 200 added 0.5% to 7,374.10. South Korea´s Kospi gained 0.7% to 2,730.13. Hong Kong´s Hang Seng jumped 2.4% to 22,410.06, while the Shanghai Composite rose 0.5% to 3,274.69.

“With few levers remaining to pressure Russia short of military intervention, the market is beginning to price in the loss of a significant amount of Russian oil needing to be backfilled,” said Stephen Innes, managing partner at SPI Asset Management.

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Bond yields rose sharply for the second day in a row, reflecting expectations of more aggressive interest rate hikes by the Federal Reserve as the central bank moves to squelch the highest inflation in decades. The yield on the 10-year Treasury climbed Wednesday to 2.41% from 2.30% late Monday.

The rise in bond yields and stocks comes a day after U.S. Federal Reserve Chair Jerome Powell said the central bank was prepared to move more aggressively in raising interest rates in its fight against inflation, if it needs to do so.

Technology companies led the rally Tuesday.

The S&P 500 rose 1.1% to 4,511.61, with more than 70% of stocks in the benchmark index notching gains. The Dow Jones Industrial Average gained 0.7% to 34,807.46. The tech-heavy Nasdaq rose 2% to 14,108.82.

Smaller company stocks also bounced back. The Russell 2000 index added 1.1% to 2,088.34.

Markets have been choppy as Wall Street adjusts to slower economic growth now that federal spending on various stimulus measures has faded away.

Banks helped send the market higher as bond yields continued rising. Higher bond yields allow banks to charge more lucrative interest on loans. Bank of America rose 3.1% and JPMorgan Chase gained 2.1%.

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